MercoPress. South Atlantic News Agency

YPF announces discovery of conventional oil well in Mendoza: 15m barrels

The Mirador del Valle x-1 well struck oil at 1.789 meters deep with a daily production of 535 barrels

Argentina's nationalized YPF has discovered a new conventional oil well in the western Mendoza province, which will add 15 million barrels of crude to its reserves. Initial production at the El Manzano bloc and the Mirador del Valle x-1 well at 1,789 meters deep is expected to be around 535 barrels per day, the company said.

 The discovery would imply a 2.5% increase in the company’s proven reserves at the end of last year, considering the company’s total declared reserves in its 2012 annual report were of 590 million barrels of oil.

Yet the significance of the find goes beyond raw numbers, demonstrating how conventional discoveries continue to be an important part of YPF’s portfolio at a time when much of the attention from the media and the industry as a whole is on the country’s potential in unconventional resources, particularly those located in the Vaca Muerta formation.

“This achievement is the result of an aggressive exploratory plan that YPF put in place with the objective of increasing Argentina’s hydrocarbon resources,” YPF said in a news release.

“Exploratory activity in Mendoza has seen significant growth, a result of the intense work that YPF has been carrying out in the province,” said Carlos Colo, YPF’s executive manager of exploration. “This new discovery, added to others recently carried out in the Vizcacheras and Chachahuen blocs, is a milestone for this new YPF management.”

President Cristina Fernández signed the seizure of 51% of YPF’s shares from Repsol in May of last year. Since then, the company has been seeking out private partners to help it finance part of its ambitious 32.6 billion dollars five-year plan that it unveiled shortly after last year’s nationalization.

When it took over majority control of YPF, Cristina Fernández administration said it would seek to reverse years-long declines in production that have forced Argentina to pay an ever-increasing bill for energy imports.